Forex Afternoon Wrap – 17/12

Dec 17 2015, 1:45 pm
forex afternoon finance

UK Retail sales rise 1.70%. Markets calm after Fed hikes rates!

  • Japan Merchandise trade exports y/y -3.3% vs. -1.6%; trade imports y/y -10.2% vs. -7.3%
  • German IFO Business climate 108.7 vs. 109.0; IFO current assessment 112.8 vs. 113.4
  • EU Trade Balance total 4.81bn vs. 2.87bn
  • UK Retail sales m/m 1.7% vs. 0.6%
  • US Weekly jobless claims 271k vs. 274k
  • US Current Account -124.1bn vs. -118.5bn
  • Philly Fed Manufacturing Index -5.9 vs. 1.0


  • The US Leading indicators

The US Federal Reserve hiked interest rates by 25 basis points at the FOMC meeting yesterday in a widely expected moved. The rate hike was followed by hawkish Fed projection which is expected to hike rates four times next year. The rate hike yesterday passed off rather smoothly with little volatility. The markets opened today on a positive note with the Asian equity markets closing broadly positive. The Nikkei 225 Index closed the day             with 1.59% gains while the Hang Seng and the Shanghai Composite both closed with gains of 0.79% and 1.83% respectively.

The Japanese Yen was trending higher since yesterday with gains of 0.20% at the time of writing. USDJPY hit a session high near 122.61 before easing back lower. Data from Japan this morning included the merchandise trade import and export data, both of which fell sharply.

On the commodity risk currencies, the Australian dollar was choppy yesterday and declined at the start of today’s trading. AUDUSD is down -0.67% with the currency testing the lows near 0.7167 in early trading. The Kiwi was also weaker down -0.79% for the day but price action was relatively stable. NZDUSD started to decline since the open and tested the session lows of 0.6722 on a failed attempt to break above 0.6765.

The European trading session saw the German IFO business climate ease back, rising 108.7 against estimates of 109. EU trade balance data increased to 4.8 billion against estimates of 2.87billion. The Euro remained subdued in today’s trading with the single currency down -0.69% at the time of writing. EURUSD decline since the start of today’s session after a brief touch to 1.10 yesterday and is trading near intraday lows of 1.083.

[Tweet “UK retail sales beat the estimates and reach 1.7%”]

The British Pound was also weaker today, down -0.62% for the day. UK retail sales numbers managed to come out better than expected, rising 1.7% for the month and beating estimates of 0.6%. The GBPUSD attempted to break higher and posted a session high near the open at 1.501 but soon gave back the gains to trade near the lows of 1.49. The European equity markets were also trading higher today with the German DAX rising 3.11% for the day while the London FTSE100 is up 1.36%.

The US markets opened with the weekly jobless claims rising 271k below estimates of 274k. However, the Philly Fed manufacturing index was weak, declining -5.9 against estimates of an increase to 1.0. The US Dollar Index is up 0.62% for the day.

On the commodity front, Gold prices are weak, down -1.08% testing the lows of $1060 at the time of writing, while WTI Crude Oil is down -1.18% with prices touching a bottom near $35 a barrel. The remainder of the evening is rather quiet with the US leading indicators data being the final data release for today.

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John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.

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